The European Commission has approved a 16 million euro increase in state aid for the financing of the project “Rehabilitation of the district heating system of the Municipality of Bucharest”, an investment of strategic importance for the efficiency of the network in the capital, the Competition Council announced.

In 2021, the Commission authorized aid of 254 million euros from European structural funds for the modernization of the district heating system in the urban area of ​​Bucharest. Last week, this amount was supplemented, reaching a total of 270 million euros, the additional funding being provided through the Sustainable Development Program 2021–2027.

At the same time, the Commission extended the period for granting state aid until 31 December 2027.

These changes were generated by the extension of public procurement procedures, as well as by the higher costs of the works and services necessary for the execution of the project, resulting from the public procurement process, compared to those initially estimated (in particular, as a result of the increase in the prices of construction materials).

“The rehabilitation of the district heating system in Bucharest is a project with a direct impact on the quality of life of the capital’s residents. This investment will reduce heat and water losses, which means more efficient services and lower maintenance costs. As the national authority in the field of state aid, we collaborated with the European Commission and the Romanian authorities to ensure the compliance of the measures with European regulations and we provided technical assistance for their development and implementation”, stated Bogdan Chirițoiu, President of the Competition Council.

The district heating system in Bucharest is the largest in the European Union, serving approximately 1.2 million inhabitants. The network includes approximately 940 km of pipes for the transport of the heat agent and approximately 2,800 km of pipes for distribution.

The rehabilitation of the system involves the replacement of critical sections of the main hot water transport pipes, equivalent to approximately 10% of the total length of the network.

We remind you that at the national level there are several state aid schemes for district heating. Thus, operators that provide the service of general economic interest of production, transport, distribution and supply of thermal energy in a centralized system to the population receive financial compensation in the form of subsidizing the price of thermal energy delivered to the population and covering the losses induced by the provision of the service and not accepted in the price/tariff.

Until the end of 2030, the scheme aimed at supporting the modernization/rehabilitation of the smart district heating network can be accessed. The total budget of the scheme is 200 million euros and represents non-reimbursable amounts from the Modernization Fund.

Also underway is the scheme dedicated to the modernization and construction of high-efficiency cogeneration (CHP) plants, for a capacity of 500 MW, whose budget is 750 million euros. The scheme for the promotion of high-efficiency cogeneration based on the demand for useful thermal energy, which provides a bonus for electricity produced in high-efficiency cogeneration, is also applicable until 2033, for producers who meet the conditions.